You probably don’t want to think about life insurance. After all, making plans for your death is ideally far in the future.
However much you hope to avoid it, putting a life insurance policy in place is crucial to provide you and your family with security in case a tragedy strikes.
In addition to the morbidity of purchasing life insurance, many people avoid it for fear that they cannot afford a decent policy.
But what if I told you there were steps you could take to get lower premiums?
Top 15 Ways to Lower Life Insurance Premiums
If the cost of life insurance premiums is holding you back, consider these ways to lower your premiums.
In addition to saving you money and providing protection for your family, you’ll find that a lot of these suggestions will improve your daily life as well. It’s a win-win!
1. Reduce Your Coverage
Life insurance can help cover the cost of your funeral and debt, even leaving some money to help your family members afterward, but take a good look at your coverage before shelling out more than you need to.
Does it make sense to have hundreds of thousands of dollars’ worth of coverage to cover these expenses? Perhaps not. By reducing your coverage to what you need, you can also reduce your life insurance premium.
2. Research Coverage Thresholds
Now that you have a good idea of how much coverage you need, you might actually be able to save money by rounding up the number. That’s because many insurance providers create various threshold levels where the rates are different based on your coverage.
So, if you’re on the edge of that threshold, you could save on your premium by bumping up to the next category. For instance, a $500,000 policy may cost less than a $490,000 policy. This principle is often true as you approach multiples of $250,000.
3. Quit Smoking
Since using tobacco puts you in a high-risk category, given that 443,000 people die from smoking or second-hand smoke each year, your insurance premiums will be higher than your non-smoking counterpart.
We ran the numbers and found that in many instances, smokers paid almost four times as much for their insurance premium.
Don’t bother lying, either. Insurance companies can access your medical records (with your consent, which is often given during the application process). In addition, some companies require a physical exam, which will confirm whether you’re a smoker or not. If the insurance company finds that you lied, they could cancel the policy.
4. Lose Weight
Obesity has been linked to a variety of conditions, including heart disease, high blood pressure, stroke, arthritis, cancer, diabetes, and more.
This means being overweight or obese puts you in a high-risk category, which sends your insurance premiums skyrocketing.
If you haven’t found enough motivation to work down to your ideal weight before, perhaps several hundred dollars in savings can help. Not sure what your ideal goal weight should be? Use this ideal weight calculator.
5. Manage Your Health Conditions
If you have high blood pressure, high cholesterol, asthma, or other pre-existing conditions, don’t count yourself out of great rates just yet. Maybe you live a tobacco-free life, eat healthy, exercise, and maintain a healthy weight, but you deal with a pesky condition like high blood pressure.
They key to getting affordable life insurance premiums in that case is demonstrating to the underwriters that your condition is, and has been for some time, under control.
How do you demonstrate such a thing? By attending regular checkups with your doctor, taking your medications as prescribed, and keeping your levels in check.
6. Ditch Your Dangerous Hobbies
If you love the thrill of jumping out of planes, climbing mountains, or pretty much any other life-endangering hobbies, it’s going to cost you. A lot.
In this case, you need to decide how important your adventurous pursuits are to you. If your main goal is saving money on life insurance premiums, no matter what you have to give up to do so, it may be time to say goodbye to your scuba gear.
In some cases, you may be able to get an exclusion rider with your policy, too, meaning your policy will not pay out if you die in the act of one of your risky ventures.
7. Ask for a Rate Reevaluation
If you quit smoking, lose weight, or improve your health in other ways, such as controlling your cholesterol or blood pressure, you can apply for a rate reconsideration.
This is where your insurance provider will take another look at your health and give you the lower rate if you’ve sustained better health for a year or more.
Don’t think you’re stuck with a terrible rate forever because of your health. Once you change your lifestyle, you can change your premiums too.
8. Research (and Avoid) Hidden Fees
Another way to save money is by researching hidden fees to get the cheapest deal. For instance, some providers tack on an extra fee for paying your premium monthly and not yearly.
They might also offer coverage you don’t need or want, which you could be paying for without realizing it. Add-ons you may not want that could be costing you include:
- Accidental death benefit, where if the insured individual’s death is an accident, there’s a larger payout.
- Disability income rider, where you’ll receive an amount of income if you become disabled.
- Waiver of premium, where you can waive premium payments if you become disabled.
9. Choose Term Life Insurance
Term life insurance is a policy that expires (although you can set it up to automatically renew) and serves as insurance only, whereas whole life insurance is a permanent form of life insurance that involves a savings component.
In most cases, term life insurance is more practical and a lot cheaper than whole life insurance. Oftentimes term life insurance is better when:
- You can’t afford a high premium.
- You’re in good health.
- You’re looking for something simple to provide you and your beneficiaries with a sense of security.
10. Think About the Term Length
Generally speaking, the longer your term insurance coverage lasts, the more expensive the policy will be. Look at your financial goals, your debt, your kids’ ages, and your nearness to retirement to decide how long you actually need the life insurance policy in place.
Say you and your spouse are on the brink of retirement, your kids are now self-sufficient adults, and your only outstanding debt is your mortgage, which you’ll have paid off in the next 4 years.
In that case, you’re probably safe to purchase a 5-year policy to cover your needs and save money on premiums.
11. Apply Now
As your aching joints and greying head can attest, your health declines with age. Age itself is one of the main risk factors life insurance providers consider when they decide on your rates.
Even if you’re in the same great health ten years from now that you are today, that decade will cost you. In fact, just one year’s time will increase your rates.
If you have dependents, transferable debt, or a spouse to provide for and you want to get the lowest rates you possibly can, there is no time like the present.
12. Avoid a Guaranteed Issue Policy if You’re Healthy
A guaranteed issue policy is one where you’re guaranteed the policy without a medical exam. Instead, you simply answer a few questions related to your medical history.
However, because the company is taking a huge risk insuring you, the policies are often more expensive. There’s no reason to choose a policy like this if you can breeze through a medical exam.
13. Maintain a Clean Driving Record
While a clean driving record may seem like it has more to do with your car insurance than your life insurance, it can actually affect how much you pay in your life insurance premiums.
This is because a poor driving record puts you at a higher risk of death. Keep a clean driving record by:
- Following local laws, including speed limit postings.
- Maintaining your vehicle. A missing mirror could lead to an accident.
- Minimizing distractions.
- Wearing your seat belt.
14. Boost Your Credit Score
People aren’t exaggerating when they say your credit score impacts everything. While an average score that falls in the fair or good range won’t necessarily exclude you from affordable rates, a really poor one might.
The company will mainly be looking for red flags like bankruptcy, as the way you deal with debt could indicate a broader lifestyle of risk. Conversely, if you have extremely excellent credit, you may be able to qualify for a higher rate class in some rare cases.
15. Compare Providers
Like with any type of insurance, each insurance provider’s algorithm varies, which means that what company may be cheapest for your friend may not be cheapest for you.
Do your research before settling or changing your insurance provider to get a good idea of what the best deal is for your situation. You can compare companies here, or by using the quote form right on this page.
Now that you have a good idea of how to lower your life insurance premiums, you can live in peace of mind knowing that if anything happens to you, your family will have an easier time dealing with your death.
Always research your premiums before purchasing. This will ensure you get the best price for the appropriate amount of coverage.
Call us today for a quote at 1-888-552-6159.